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May 3, 2002
Deloitte & Touche Nominated to NEM Executive Committee

NEM is very pleased to announce that Deloitte & Touche has been nominated to the Executive Committee. Deloitte & Touche is one of the nation's leading professional services firms. Deloitte & Touche provides accounting, assurance and advisory, tax, and management and financial and human capital consulting services through 30,000 people in more than 100 U.S. cities. Deloitte & Touche will be represented within NEM by Bob Young, Director in the firm's Global Energy Markets practice, and Kim Detiveaux, Senior Manager in the firm's Global Energy Markets practice.

NEM Executive Committee Leadership Nominations Sought

The Leadership of the NEM Executive Committee is seeking nominations for the National, Regional and State Policy Chairs and Co-Chairs for the comming year. If you would like to volunteer for a leadership role or wish to nominate someone for such a role, please forward the name and position to headquarters at your ealiest convenience. All the nominations will be circulated prior to the Annual June 20 Membership Meeting and Conference, and a special meeting of the Executive Committee is being considered for the evening of June 19 to vote on the nominations at a location to be determined.

NEM Annual Membership Meeting and National Restructuring Conference

Senators, FERC, PUC and FTC Commissioners have confirmed for NEM's Annual Membership Meeting and National Restructuring Conference to be held June 20 and 21, 2002, at the Marriott Metro Center in Washington, DC. An updated agenda, registration form and electronic brochure is hotlinked here for your convenience. Please note that the discounted registration fee for the conference has been extended to May 3, 2002. We are planning the reception and would appreciate an early head count. Also there are only a limited number of rooms at our discounted rate of $139/night.

Senate Energy Policy Act of 2002

The Senate passed the Energy Policy Act of 2002. Important provisions of the bill include: 1) FERC's authority to a) determine just and reasonable market-based rates, including consideration of market power, market nature and response mechanisms, and reserve margins, b) order retroactive refunds, and c) approve mergers; 2) incorporation of the Western Governors' proposal on an electric reliability organization providing greater authority to NERC; 3) requiring FERC to issue rules establishing an electronic information system to disseminate information on the availability and pricing of wholesale electric energy and transmission services, including the requirement that brokers, exchanges and other market-making entities provide statistical information about the amount and sale price of wholesale electric energy sales; 4) requiring access to transmission by intermittent generators; 5) repealing PUHCA but providing for FERC and state commission access to holding company and affiliate books and records; 6) establishing an Electric Energy Market Competition Taskforce; 7) setting forth amendments to PURPA such as a) requiring electric utilities to provide service under real-time pricing and/or time of use rates upon customer request, b) requiring electric utilities to provide access to the local distribution grid and competitive pricing for distributed generation, combined heat and power, and district heating and cooling systems, c) ending the mandatory obligation for electric utilities to purchase and sell electric energy from a qualified cogeneration facility or small power production facility if the facility has access to an independently administered, auction-based day-ahead and real-time wholesale electric market, and d) requiring electric utilities to make net metering available upon consumer request; 8) requiring FTC to issue rules that a) require electric utilities to make consumer information disclosures on the nature and price of services rendered as well as access, exit, stranded cost and customer service charges, b) prohibit electric utilities from disclosing customer information without approval except when information is shared to facilitate customer switching, c) prohibit slamming and cramming of electric customers, and d) may include requirements that electric utilities provide access to aggregate consumer information; 9) establishing a renewable portfolio requirement to be phased in from 1% to 10% of a retail electric supplier's annual amount sold beginning in 2005 through 2020; 10) providing for construction of a natural gas pipeline from the Alaskan North Slope into the U.S.; and 11) providing a deduction, not to exceed $30, for qualified new or retrofitted energy management devices. The full text of the Senate's Energy Policy Act of 2002 is available on the NEM Website.

Petition on Internet and Telephonic Enrollment of NEM and Its Members

NEM, and its members, MidAmerican Energy, Nicor Energy and AES NewEnergy submitted a petition requesting that the Commission open a proceeding on internet and telephonic enrollment. The marketers argued that permitting internet and telephonic enrollment is consistent with existing federal and state law and has already been approved for the gas pilot programs. The full text of the Petition is available on the NEM Website.

Many thanks to George Phillips and Misty Allen of MidAmerican Energy for their assistance with this matter.

Service Termination, Payment Plan, and Residential Customer Deposit Rulemaking

NEM submitted a proposal for discussion at this week's meeting to discuss changes to the regulations on service terminations, payment plans, and residential customer deposits. NEM urged that an important issue underlying customer terminations is the timely and accurate processing of information for utility-consolidated billing. NEM urged that billing processes and procedures must be implemented to allow for adjustments to customer bills. NEM also recommended that in the interim before utility systems are configured to accommodate the dynamic electronic exchange of information, that marketers should be permitted to elect to have the utility billing party cash out receivables at a reasonable rate and handle billing issues internally until billing is competitively unbundled and outsourced. The full text of NEM's Discussion Proposal is available on the NEM Website.

Many thanks to Michael D'Angelo and Susan Lehner of Total Gas & Electric for their assistance with this proceeding.

Consumers Stranded Cost Recovery Application

Consumers filed an application for recovery of stranded costs requesting that a transition charge of $$0.030693/kWh be assessed for recovery of net stranded costs incurred in 2000 and 2001. However, Consumers notes that imposition of a charge of this magnitude could negatively impact the retail access program and therefore proposes that the transition charge be set at $0.012500/kWh, with the amounts not collected to be deferred for future recovery with a carrying cost and to be reduced by excess securitization savings. Consumers proposes that the stranded cost recovery process should continue at least through the end of the rate freeze period after which time a general rate proceeding should be held to reestablish base rates. Consumers also proposes that it should be able to self-implement a stranded cost transition charge, commencing each April 1, based on the previous year's actual stranded cost calculation and prospective April through March forecasted retail access sales. The full text of Consumers' Stranded Cost Recovery Application is available on the NEM Website.

New York
Niagara Mohawk Distributed Generation Pilot

Niagara Mohawk will hold a meeting on May 15, 2002, at 10AM at their North Albany office on their distributed generation pilot program. NIMO will release two RFPs in the pilot on July 1, 2002, and two RFPs on January 2, 2003. The purpose of the May 15 meeting to provide information about geographic location, size and timing of system needs to potential bidders prior to the issuance of the RFPs. Additional information on the pilot program is available at:

Commission Opens Proceeding on Competitive Gas Metering

The Commission has instituted a proceeding considering the competitive provision of gas metering services for large customers. The Commission has requested comments on the following issues: 1) pros and cons of allowing large customers to procure metering and meter data services from competitive providers; 2) pros and cons of allowing large customers to have their own energy content measurement equipment on site, rather than depending on the generic therm factor used in therm zones; 3) how much of daily or monthly imbalances for large customers is attributable to energy content variances; 4) how large should a customer be in order to utilize competitive gas metering; 5) are there safety issues associated with competitive gas metering; 6) what provisions of the competitive electric metering manual should be modified to incorporate gas metering; and 7) should residential and small commercial customers be able to utilize competitive gas metering. Participation requests are due May 10, 2002, and comments are due June 25, 2002. The full texts of the Order Instituting Proceeding and Notice Requesting Comments are available on the NEM Website.

Order on ConEd Electric Phase 5 Program

The Commission issued an Order on ConEd's Phase 5 electric program. Upon the urging of NEM, the Commission denied ConEd's request to decrease its backout credit and ordered that credits of 2 mills for non-demand billed and 1 mill for demand billed retail choice customers be retained until unbundled rates are implemented. The Commission retained the cost recovery mechanism ordered in Phase 4. The Commission also denied ConEd's proposal to require marketers to include assigment provisions in their contracts. The full text of the Order is available on the NEM Website. Bill format is to be addressed in a collaborative. The full texts of the Order and ConEd's Revised Retail Access Tariff are available on the NEM Website.

RGE Standby Delivery Service Rate Filing

RGE has filed proposed standby service delivery rates. The filing sets forth three components to the delivery rates - a customer charge, a contract demand charge and a daily as-used demand charge. Standby customers will be charged for energy withdrawn from RGE's system using the energy and capacity base backout rate from its retail access program. Interval metering is required for all customers with electric loads of 50 kw or more. If a standby customer's measured demand exceeds its current contract demand by 10% or less, a surcharge of twelve times the contract demand rate times the demand in excess of the contract demand will be charged to that monthly bill and the monthly contract demand will be increased by the amount of the excess. If a standby customer's measured demand exceeds its current contract demand by more than 10%, a surcharge of twenty-four times the contract demand times the demand in excess over the contract demand will be charged to that monthly bill and the monthly contract demand will be increased by the amount of the excess. The full text of RGE's Proposed Standby Delivery Service Rates is available on the NEM Website.

Gas Supplier Rules Working Group Meeting

Staff convened the initial meeting of the gas supplier rules implementation working group on April 30, 2002. As a result of the meeting, marketers will gather to discuss the issues and a follow up meeting of the entire working group will be held on May 30, 2002.

Many thanks to Steve Sherman of Krieg, Devault, Alexander & Capehart for his assistance with this matter.

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